Urban Growth Boundary and Housing Prices: The Case of Knox County, Tennessee

This study tests the hypothesis that a higher present value of expected rental stream of undeveloped land in the urban growth area influences the effect of the Urban Growth Boundary (UGB) on the values of newly developed houses in Knoxville and Knox County, Tennessee. We estimate a version of the Box-Cox (BC) transformed hedonic housing price model, which accommodates both non-normality and heteroskedasticity in the stochastic error term. The finding of this study verifies the premise that the values of newly developed houses after the implementation of a UGB are likely to be higher within the urban growth area than those outside, all other things equal.